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3 Growth-Focused Specialty Retail Stocks to Buy

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The retail sector has experienced its fair share of volatility over the last year, driven by shifting shopping habits more so than any specific trends in fashion or electronics. This has led many inventors to stay away from the retail industry, but in reality, not all stocks are as susceptible to the online shopping undercut as others.

Retail will never be as steady as some sectors, and even industry bellwethers such as Walmart (WMT - Free Report) and Target (TGT - Free Report) have been forced to restructure their business models in the Amazon (AMZN - Free Report) age. This should make investors consider retail stocks that operate, in large part, outside of the scope of big box chains. But even this alone is not enough.

With that said, if investors also focus on retail stocks that are poised to expand their bottom lines while navigating a clearly separate road, they should be able to perform well amid the industry’s recent volatility.

Now, let’s take a look at three specialty retail stocks that are projected to see their earnings surge.

1.      Canada Goose (GOOS - Free Report)

This upscale seller of down jackets is expected to see its earnings skyrocket by over 60% this fiscal year to hit $0.53 per share, based on our current Zacks Consensus Estimates. Canada Goose has also received positive earnings estimate revisions with complete upside agreement for its current full year as well as the following fiscal year.

Canada Goose is currently a Zacks Rank #2 (Buy) and sports an “A” grade for Growth in our Style Scores system. Furthermore, the parka power is expected to expand its EPS figures at an annualized rate of 26.15% over the next three to five years, while its high-end coats remain relatively immune from price manipulation online.

2.       Five Below, Inc. (FIVE - Free Report)

Five Below operates in a sector of the retail world that has, for the most part, been able to buck shopping trends hurting the industry as a whole. The discount retail giant, which has opened a ton of new stores recently, is currently a Zacks Rank #2 (Buy). FIVE has also witnessed six earnings estimate revisions with 100% agreement to the upside for both its current fiscal and the following year.

Our estimates call for Five Below’s current full-year earnings to pop by nearly 40%. Looking even further ahead, the retailer is projectedto grow its earnings per share figures at an annualized rate of 28.67% over the next three to five years.

3.       Restoration Hardware Holdings Inc. (RH - Free Report)

Restoration Hardware has been able to diversify amid these changing retail times and sells industry-leading prestige furniture products. The firm is currently a Zacks Rank #1 (Strong Buy) and rocks an “A” grade for Growth.

RH is expected to reports its Q4 and full-year 2017 results on Thursday, Feb. 22. When it does, the home décor giant is projected to see its full year earnings skyrocket over 132%. This massive bottom-line expansion is expected to carry into 2018 as well. Restoration Hardware is expected to post earnings of $5.35 per share next year, which would mark a nearly 83% year-over-year jump from our current 2017 projections. On top of that, RH is expected to see its bottom-line surge at an annualized rate of 20% over the next three to five years.

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